Unfortunately that a Headley residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Headley property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If lease term dips below 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Headley will be able to extend under the legislation; however a lawyer should be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the formalities.
Leasehold premises in Headley with over one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service will provide you enhanced control over the value of your Headley leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Eli was the the leasehold owner of a 2 bedroom flat in Headley being sold with a lease of fraction over 61 years unexpired. Eli informally approached his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £50 annually. No ground rent would be due on a lease extension were Eli to exercise his statutory right. Eli procured expert advice and secured satisfactory deal without resorting to tribunal and sell the flat.
Last May we were contacted by Mr Leo Gray , who acquired a basement flat in Headley in September 1997. We are asked if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparative homes in Headley with an extended lease were valued around £243,000. The mid-range amount of ground rent was £65 billed per annum. The lease concluded on 17 April 2089. Taking into account 63 years remaining we calculated the compensation to the freeholder for the lease extension to be between £20,000 and £23,000 exclusive of costs.
Last Spring we were called by Dr Sebastian Carter , who acquired a first floor flat in Headley in April 1998. The dilemma was if we could estimate the price would be for a 90 year lease extension. Comparative premises in Headley with 100 year plus lease were valued around £181,600. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease concluded in 2078. Considering the 52 years as a residual term we calculated the premium to the landlord for the lease extension to be between £30,400 and £35,200 not including expenses.